Topline President Donald Trump’s sweeping domestic policy bill proposes a major overhaul of student loan programs and repayment plans in order to fund the bill’s tax cuts—though as the bill has made its way to the Senate after passing the House, some of its most controversial proposals are getting stripped down. President Donald Trump arrives with Speaker of the House Mike Johnson, R-La.. for a House Republican … More meeting at the U.S. Capitol on May 20. Getty Images

Key Facts

The domestic policy bill—referred to as the president’s “One Big Beautiful Bill”—is now being considered by the Senate, after previously passing the House in a 215-214 vote. The House bill would overhaul the federal student loan program, imposing restrictions on new student loans and abolishing most loan repayment plans. Under that bill, borrowers would only have two options for paying their loans off, either through a standard repayment plan (paying the same amount every month) or a new plan based on annual income. Advocates have strongly decried the bill’s provisions, with the Student Borrower Protection Center (SBPC) projecting the new rules would disqualify many borrowers who now receive Pell Grants, force more borrowers to take out private loans due to the new federal limits, and increase monthly payments for many existing borrowers who are paying down their loans. The Senate Health, Education, Labor, and Pensions (HELP) Committee released its own version of the bill’s section on education on June 10, which tones down or gets rid of some controversial provisions of the House bill, like caps on student loans and restrictions on Pell Grants for part-time students. The Senate Parliamentarian then ruled Thursday some aspects of the student loan proposals should be struck from the bill because they don’t meet the criteria for the Senate to pass the bill through reconciliation—a process that allows the chamber to pass some budget-related measures with only a simple majority rather than 60 votes. One part of the bill struck down by the Parliamentarian would have forced borrowers who are already paying off loans to switch to the new repayment plans. It’s still in flux what a final bill could end up looking like: The Senate still has to put forth a final version of the bill to vote on, which means the provisions that are in the text now are still subject to change, and then the House will have to approve the changes before the bill can become law.

Trump’s Bill Could Change How Student Loan Amounts Are Calculated

House Version: The House version of the bill proposes changing the formula for how much the federal government grants borrowers. Loans would be calculated based on the median cost of all similar college programs, rather than the cost to attend the specific school or program the student is attending. (It is unclear how that number will be calculated.) That means students attending higher-priced schools would receive less money, because the rate will take into account other schools that are less expensive.

How It’s Changing: The Senate HELP Committee’s version of the bill gets rid of that provision entirely, meaning student loans would be calculated as they have been in the past, though it remains to be seen what the final bill text will say.

Trump’s Bill Imposes New Maximum Borrowing Limits

House Version: The House bill changes existing caps on student loans and imposes new limits on the amount of federal student loans that both parents and students can take out, with a ceiling of $50,000 in total undergraduate loans and $100,000 or $150,000 for graduate and professional programs. Parents would also be limited to only taking out $50,000 total in federal loans to pay for their children’s education, which applies even if parents are taking out loans for multiple children. Students and their parents would not be allowed to borrow more than $200,000 in total—including both undergraduate and graduate loans—under the House bill.

How It’s Changing: The Senate version of the bill gets rid of the $50,000 cap for undergraduate students, though it does limit parents to borrowing $20,000 per year for each child, with a $65,000 total cap per student. It also limits graduate students to $20,500 per year in loans and $100,000 in total, while students in professional schools, like medical school, are limited to $50,000 in loans per year and $200,000 in total. The Senate slightly raised the overall lifetime cap on student loans from the House version, now capping all federal student loans that a borrower receives—excluding Parent PLUS loans—at $257,500. Those limits would all take effect on July 1, 2026, under the Senate bill, but students who are already borrowing money would be allowed to use the old rules until they finish their program of study.

The Plan Cuts Some Loan Eligibility

House Version: House lawmakers proposed limiting some federal loans, including restricting graduate students and parents from receiving Federal Direct PLUS Loans starting in July 2026. It also prohibits parents from taking out loans if the student hasn’t taken out the maximum amount of unsubsidized loans they’re eligible for first, and gets rid of subsidized loans for undergraduate students. The bill restricts many non-citizens from being eligible for student aid, which they could previously receive, including asylum seekers, refugees and human trafficking victims.

How It’s Changing: The Senate version also gets rid of the Graduate PLUS loan program, but does away with the restrictions on when parents can take out loans, and keeps subsidized loans for undergrads. The HELP Committee kept the restrictions on non-citizens receiving student aid, but the Senate Parliamentarian has said the Senate cannot impose those restrictions.

Trump’s Policy Bill Gets Rid Of Most Student Loan Payment Plans

House Version: The bill would abolish most of the current options that borrowers have to repay their student loans, instead giving borrowers—including those who have already been paying off loans—the choice of only a standard repayment plan or a new Repayment Assistance Plan (RAP) based on annual income. The standard repayment plan means borrowers will pay back their loan at a fixed rate each month. Loans of up to $25,000 will be paid over the course of 10 years, loans of up to $50,000 will be paid over 15 years, loans of up to $100,000 will be paid over 20 years and loans over that amount will be spread out over 25 years. RAP replaces existing income-driven repayment plans, but still allows borrowers to make their monthly payments based on income. Borrowers pay rates based on their annual income, which range from $120 per year for those making less than $10,000 (divided up into $10 monthly payments) to 10% of gross annual income for those making over $100,000. Unlike previous income-based plans, RAP allows borrowers’ remaining loans to be forgiven after 30 years of making payments—up from 20 or 25 years under current plans—and has a minimum payment of $10 each month, while low-income borrowers can now qualify for $0 repayments.

How It’s Changing: The Senate’s version of the repayment plans are mostly the same, but it allows borrowers to take their spouse’s income into account, while the House version wouldn’t. The Senate version also keeps a cap on monthly payments under income-based repayment plans, which the House got rid of.

Who Will The Changes To Student Loan Payment Affect?

House Version: The bill says the new provisions on loan repayments will apply to all borrowers who are still repaying their debt. RAP would take effect on July 1, 2026, though it also directs the Secretary of Education to start transitioning to the new payment policies within nine months of the bill being enacted into law.

How It’s Changing: The Senate kept the provisions requiring current borrowers to switch to the new repayment plans, but the Senate Parliamentarian struck that down, ruling senators cannot pass it with only a simple majority. That means the final version of the bill is likely to let existing borrowers keep their current income-based repayment plans, and only new borrowers would have to choose between RAP or the standard payment plan.

Trump’s Policy Bill Adds Restrictions For Pell Grants

House Version: The House version of the bill states students can’t receive Pell Grants if they’re enrolled in school less than half time and raises the necessary number of credits taken per year from 24 to 30, a controversial proposal that the SBPC noted would affect many low-income students who are attending school in their spare time. The bill also disqualifies students from Pell Grants if their student aid index—a number demonstrating a student’s financial need, based on their families’ financial resources and expenses—is at least twice the maximum Pell Grant given that year. House lawmakers established a new Pell Grant program for short workforce training programs, which must be less than 15 weeks long and either lead to a postsecondary certification or is recognized by a state’s governor as aligning with a “high-skill, high-wage” or “in-demand” job or industry.

How It’s Changing: The Senate got rid of the House’s changes to how many credits a student must be enrolled in in order to receive Pell Grants, though it kept the restrictions based on a borrower’s student aid index in tact. The Senate Parliamentarian also struck the creation of Pell Grants for short-term courses from the bill.

Trump’s Bill Changes Forbearance And Deferring Payments On Student Loans

Both versions of Trump’s policy bill get rid of current rules that allow borrowers to temporarily have their loan payments deferred due to unemployment or economic hardship, which will apply to borrowers who take out loans starting in July 2025. Both the House and Senate also place new limits on forbearance—a temporary pause on loan payments—which states loans can’t be in forbearance for more than 9 months during any 24-month period. The bill does help borrowers by allowing them to now rehabilitate their loans twice, rather than once. That refers to when borrowers can get out of being in default on their loans by making a certain number of on-time payments under a rehabilitation agreement.

Potential Impacts Of The Trump Policy Bill

The new restrictions on federal student loans could force more students and parents to turn to private lenders, which currently make up less than 10% of all student loans issued. Private loans have many disadvantages as compared with federal ones, as they typically have higher interest rates, are not eligible for income-based repayment plans and don’t offer forgiveness programs. Medical experts have also warned the House’s proposed $150,000 cap on loans for professional schools could further exacerbate the U.S.’s doctor shortage by making it more expensive for students to attend medical school, though the Senate version of the bill slightly raises that cap. When it comes to paying off loans, SBPC projects RAP will broadly increase borrowers’ payments as compared with previous Biden-era income-based payment plans designed to help borrowers make lower payments. The average borrower with a college degree will pay $2,928 more per year than under the Biden-era SAVE plan, SBPC estimates, and the bill also means borrowers will spend longer paying off their loans than they would under current rules.

Big Number

42.5 million. That’s the number of borrowers with outstanding federal student loan debt as of the second quarter of 2025, according to the Department of Education.

Key Background

Student loan debt has become a key political issue over the past few years, as Democrats have fought for loan forgiveness and the Biden administration sought to provide sweeping debt relief, only to have Republicans challenge it in court and the Supreme Court strike it down. While the Biden administration still made numerous piecemeal moves to forgive Americans’ debt, the Trump administration has not followed suit, with Education Secretary Linda McMahon saying in April that “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.” Trump has ordered the student loan portfolio to move under the Small Business Administration as he seeks to abolish the Department of Education, and he has also sought to restrict loan forgiveness for public servants so that it excludes employees working at organizations that are opposed to his policy agenda. Most notably, the Trump administration resumed debt collections May 5 for borrowers who have defaulted on their student loans, after collections had previously been on pause since the COVID-19 pandemic. The move is expected to impact millions of borrowers who haven’t paid their loans for approximately nine months, and the Trump administration intends to garnish a portion of workers’ wages if their loans remain unpaid.

Further Reading

Forbes Trump’s Presidency And Student Loans: What Move To Small Business Administration Means For Borrowers

Forbes Trump Resumes Defaulted Student Loan Collections Today—Impacting Millions Of Borrowers. Here’s What To Know.

Forbes GOP Will Extend Student Loan Forgiveness Tax Relief, But Only Narrowly

Nevertheless, Senate Majority Leader John Thune said he was pushing for a vote this week, and Treasury Secretary Scott Bessent said he expected the Senate to be able to vote by Friday.

President Trump has demanded lawmakers pass the bill by July 4, and this week, he said no lawmaker could go on vacation until they did so. Meanwhile, House members are pushing back on the already significant changes the Senate has made to their version of the bill, such as extending some clean energy tax breaks on a temporary basis, and there are divisions in both chambers over cuts to social safety net programs and treatment of the SALT taxes. And some Republican senators, led by Wisconsin’s Ron Johnson, who called the bill “immoral,” are balking at the price rag.

The quarterly CNBC CFO Council Survey is a sampling of views from its members who represent organizations across the economy. The Q2 2025 survey fielded responses from 30 CFOs.

A majority (86%) of CFOs at companies across the economy surveyed by CNBC say there will be significant changes made to the bill, but it will become law. And they expect the corporate tax breaks temporarily made law by Trump’s 2017 tax act to still be on the books as they face expiration at year-end.

One thing has been true about both the Republican and Democratic parties on Capitol Hill in recent decades — even as the partisan divide has widened. No matter how much they may talk about the deficit and reining in spending, that’s never stopped either party in power from passing bills that don’t exactly add up when it comes to balancing the books of the federal government.

Speaker of the House Mike Johnson, R-La., speaks to the media after the House narrowly passed a bill forwarding President Donald Trump’s agenda at the Capitol on May 22, 2025.

In the end, there may be more time for lawmakers to iron out their differences beyond July 4 if needed, according to tax experts, and it would be no surprise if they take every opportunity to maximize their leverage. It was not long ago that headlines proclaimed the since-passed House version of the bill as being on the ropes and similar headlines have emerged about the Senate effort. Words like “revolt” and “mutiny” are still in the headlines about the bill’s fate in a fractious Capitol Hill environment.

Congress, as the old saying goes, has never been good about getting its homework in on time.

In this case, even as deficit concerns and estimated trillions that the bill would add to it are more widespread — within the GOP, in the C-suite, and on Wall Street, where bond traders have pushed their weight around this year in the form of higher interest rates — it’s possible the real deadline for the legislation would not arrive until what is known as “X date.” That’s the date on which the U.S. would not be able to pay its debt to bondholders without raising the debt ceiling.

Congress has tied the legislation’s fate to the debt ceiling issue — though some lawmakers including Sen. Rand Paul have called for stripping it out. If it remains part of the legislative package, it is a plus in giving lawmakers motivation to pass the bill, and giving them wiggle room to work out differences and continue to be vocal in pushing for their preferred legislative projects past the July 4 deadline.

Bessent warned this week that the X date could arrive sooner than expected (the estimated date is in early August, though no more specific date is given) but he said potential court decisions requiring the government to refund tariff payments made under emergency acts could move that date up. There is also the issue of the budget math, with fiscal 2025 set to end in September, meaning if Congress didn’t make this law before then, it would have to start over with fiscal 2026 numbers.

So there is still room for Congress to kick the can down the road, keep negotiating, and use whatever leverage they have, especially in a narrowly divided Congress, and as a result gives each member more leverage over their vote.

The big risk for corporations isn’t that business tax rates go up — it’s the difference between making the corporate tax cuts enacted in 2017 permanent rather than extending them on a temporary basis again. The Senate is pushing for permanent cuts. In addition, the legislation aims to bring back a trio of preferred business tax items on bonus depreciation, interest expense, and full expensing treatment for research and development costs, which has been a political football in recent years and subject to multiple failed attempts by Congress to revive it, even with bipartisan support.

Corporations have said all year that despite Trump’s comments about bringing down business tax rates as low as 15%, their idea of a “win” is not seeing rates go up at the end of the year if the current 2017 tax cuts were to expire — any loss of a permanent extension in the legislation would still be a win, if arguably less than a game-changing one. What corporations say they need right now is for the tax cut certainty to help de-risk the environment for business, especially as tariffs are expected to serve as a headwind for the economy in the months ahead.

The CFO survey found the majority of CFOs (64%) saying tariffs will hurt the economy. Meanwhile, 100% of CFOs taking the survey said current policy uncertainty is affecting their ability to make business decisions, with about one-third saying it is having a “significant impact.”

The threat of automatic tax increases set to kick in next year would be what the corporate world sees as a self-inflicted injury at the beginning of 2026 on the part of the GOP, and according to the survey, businesses expect the GOP to avoid that.

In other survey findings of note:

Bond yields: As Congress battles over tax cuts and the deficit, and some Fed officials say they are open to rate cuts as soon as July, and Trump’s pressure on Fed Chair Powell pressures yields as well, CFOs expect yields on the 10-year Treasury to remain elevated, with 86% of the CFOs surveyed saying rates will remain between 4% and 5% at year-end. It is currently near 4.3%, and a third of CFOs expect it to be even higher by December even as the Fed is expected to enact at least a few rate cuts later this year.

Inflation: CFOs are more optimistic about the inflation outlook, even as they say tariffs will weigh on the economy. Only a few CFOs cited inflation as the biggest current risk to their business, with consumer demand and trade policy the more feared factors.

But nearly 60% of CFOs surveyed say the Fed will not be able to get inflation back down to the target rate of 2% before the second half of 2026, at the earliest.

The stock market: As stocks have rallied back from the April lows, CFOs have like investors gone back into a more bullish mode consistent with recent years. Each quarter, we ask CFOS which sector will perform the best over the next six months. In recent quarters, there was rare division among CFOs, and a relatively high percentage of respondents not citing technology as the best sector for growth. That’s now back to what has been the norm in recent history, with close to 60% of CFOS saying tech is the sector best positioned for growth.

But the recent volatility is still weighing on overall market confidence, with almost half of CFOs surveyed saying they think it is more likely the S&P 500 falls back below 5,500 than reach above 6,500 for the first time — less than a third of those surveyed see the 6,500 level as being more likely. The index has been flirting with an all-time high in recent trading.

The economy: A recession is still in the cards, according to the CFOs, with over half (55%) saying they expect a downturn either in the second half of this year, or in 2026. Most of that pessimism is geared to the second half of this year, and is likely tied to tariffs and CFO concerns about consumers who they believe are not fully prepared for price hikes, as well as concerns about the labor market softening.

And when it comes to a gut check on the overall direction in the economy, the CFOs are close to evenly split, with a little under half saying they are “somewhat optimistic” about the economy, but still a slight tilt to the “pessimistic” camp.

On a recent call of CFO Council members regularly scheduled to discuss the economic outlook on weeks when the Federal Reserve’s FOMC meets to set rate policy, one retail CFO told their peers, “my main concern is that the consumer feels like the pricing that they’re seeing today, it’s already impacted by tariffs … and so they’re breathing a sigh of relief that they’ve already seen the impact of tariffs, what it’s going to cost them. … it’s August and beyond where we’re really going to see those issues. … My big concern is the consumer thinks that they’re in great shape … that they’ve seen the impact, and they haven’t seen it yet.”

Another CFO added, “I feel like the Fed has an especially difficult job right now, given that we are starting to see some cracks in the economic data, but the impacts of tariffs in reality may not come until a much, much later point in time.”

Seventy-two percent of CFOs said tariffs will cause resurgent inflation.

As Republicans in Congress work to push forward their ‘One Big Beautiful Bill Act’ with the goal of getting it to President Trump’s desk by July 4, Colorado Democrats who control the state legislature are closely watching federal negotiations over the massive tax and spending package that is a priority of Trump’s domestic agenda.

While it’s still uncertain of what will be in the final bill, lawmakers are worried about how the federal changes will impact the state’s bottom line — especially if congressional Republicans succeed in using the bill to try to strongarm states into changing policies they oppose.

“Right now, the federal government seems to be wanting to tell us what we can and cannot do by using this big federal funding stick and holding it over our head. That doesn’t seem right to me,” said Democratic Rep. Kyle Brown of Louisville, the chair of Colorado’s House Health and Human Services Committee.

Some of the ways Republicans had hoped to force states to change their policies have so-far been ruled out of the Senate version of the bill by the Senate Parliamentarian, but even if backers can’t find a way to revive them, they represent a new front in the face off between blue states and a red Congress.

“This bill is a long way from finalized and there may be attempts in the coming days to rewrite portions of the bill to put these harmful provisions back in. While we may be breathing a temporary sigh of relief, we need to keep working to avoid harmful cuts and federal attempts to prevent Colorado from providing basic health care to our families,” said Brown.

A target on states over their health care policies

Changes to Medicaid, the federal health program for low-income children and adults, have become a huge flashpoint, especially an attempt to reduce how much money states get from the federal government if they offer state-funded health coverage to undocumented immigrants.

While undocumented immigrants are not eligible for Medicaid, three years ago, Colorado Democrats passed a bill to use state money to expand health care coverage for undocumented children and pregnant women. The Cover All Coloradans program just began enrolling people earlier this year.

The Senate parliamentarian has determined the GOP proposal to punish states that cover undocumented immigrants does not meet the requirements for the reconciliation process, known as the Byrd rule. But Republicans are likely to try to find a way to bring it back in some form. The budget reconciliation process allows the Senate to fast-track budget-related legislation with a simple majority vote.

If that provision did become law, Colorado lawmakers would have to decide whether to shutter Cover All Coloradans or give up around $300 million a year in federal funding.

Rep. Brown noted that Colorado doesn’t have an endless pot of funds to make up for lost federal support.

“We don’t even have enough money to fund the programs that we have currently in Colorado because of the structural limitations of our budget,” he said. “(If) the federal reconciliation bill passes, we will have even less money. And that will mean we will have to make very difficult choices about which kids can eat, which people have access to health insurance.”

Hart Van Denburg/CPR News FILE – Democratic state Rep. Kyle Brown during a Colorado State House committee hearing at the State Capitol, March 6, 2023.

According to the state’s latest economic forecast, the next year’s budget already faces a roughly $700 million shortfall to keep up with current state spending. And that estimate doesn’t include any potential changes at the federal level. Medicaid and education make up the biggest portion of the state budget and rising costs in those areas have been squeezing other state services.

“I’ve heard all kinds of things that we could do to reduce our Medicaid costs, and one of the options would be to cut the entire expansion population. To just say, ‘okay, we’re not doing that anymore’, and that’s 400,000 people who would lose their healthcare,” said Democratic Sen. Judy Amabile of Boulder, who sits on the legislature’s powerful Joint Budget Committee.

Those who lose Medicaid could try to purchase health insurance on Colorado’s exchange, but the reconciliation bill might also cut the subsidies available for them to buy private insurance.

Amabile said, depending on how quickly different provisions of the Republican bill are set to take effect, Colorado lawmakers might need to return to the statehouse this fall for a special legislative session to make sure Colorado can react to the federal changes.

For those opposed to Colorado offering public health care to undocumented immigrants, the reconciliation proposal offered a chance to force the state into a course correction. Three of Colorado’s Republican congress members have urged Gov. Jared Polis to end the program, highlighting the risk to state finances.

“While we have had long-standing objections to Colorado’s decision to cover illegal immigrants from both a fiscal and ethical perspective, there is a renewed urgency to revise this policy in light of the likely enactment of federal legislation to reduce the Medicaid FMAP for the expansion population from 90% to 80% for sanctuary states who use taxpayer dollars to cover illegal immigrants,” wrote U.S. Reps. Gabe Evans, Jeff Crank and Lauren Boebert. “As you know, this change would pose significant budgetary challenges to Colorado – but only if the state continues to pursue this policy.”

FMAP, the Federal Medical Assistance Percentage, is how much of the cost of Colorado’s Medicaid expansion population is covered by the federal government. If Republicans do find a way to tie it to care for undocumented immigrants, the resulting policy discussion could split statehouse Democrats.

Democratic state Rep. Lorena Garcia of Adams County doesn’t want her party to capitulate to any demands that may come down federally. She said the consequences of not covering essential services and basic healthcare for children and new mothers is far greater than the threats from the Trump administration.

“What the state has been doing for a while is preparing for our litigation strategy to hold to account the fact that the president has been overreaching and violating the Constitution in almost every single step he takes,” she said.

Garcia said Colorado must uphold its values as a state.

“We pass law because we believe in these laws and because we believe that the people in this state benefit from these laws. And if we are just okay with saying, ‘oh, well, we have this threat coming up, or these cuts have been made,’ I mean, we’re complying and I can’t comply.”

Hart Van Denburg/CPR News FILE – Democratic state Rep. Lorena Garcia, at the Capitol, March 2, 2023.

Colorado Democrats are also closely watching whether a provision on abortion makes it into the final reconciliation bill. The Senate Parliamentarian struck out language in the bill that would have prevented people from using Affordable Care Act subsidies to buy health insurance plans that cover abortion. But if Republicans can rewrite the policy in a way that passes muster, it could create immediate problems for Colorado.

Voters added an abortion rights amendment to the state constitution two years ago that explicitly requires insurance plans to cover abortion. Changing that policy would require another vote.

“Being in the constitution definitely helps,” said Democratic State Rep. Brianna Titone of Arvada. “I’m not sure how those kinds of legal situations are handled when there’s a federal mandate for something that conflicts with the state constitution.”

Health care isn’t the only area where Republicans have hoped to use reconciliation to reshape state policies.

Last year, Colorado passed the nation’s first anti-discrimination law for how businesses and governments use AI systems in some of their decision-making. It is slated to go into effect next February. But the reconciliation bill includes a ten-year time-out on state-level AI regulations, with compliance tied to federal broadband funding. Earlier this week, the parliamentarian ruled that provision can stay in the bill.

Under the proposal, letting Colorado’s law go into effect would come with a huge cost to the state.

“It’s $826 million from the federal Broadband Equity Access and Deployment program and $113 million from the State Capital Projects fund. And I don’t know how much would be clawed back or not granted as a result of that, but it could have a significant financial impact,” said Amabile.

She said losing that kind of funding for broadband would give her a lot of pause when it comes to moving ahead to implement the state’s AI law.

“Because we absolutely need that (money). That’s an equity issue,” she said. “People in underserved communities around the state don’t have access to the internet and you cannot function, you can’t get healthcare. There’s just so much tied to that. So I think it’s really a tough choice and I think we’re going to really have to give that some long, hard thought.”

Tegan Wendland/CPR Republican Rep. Gabe Evans speaks on his support for the ‘Big Beautiful’ reconciliation bill, during a press conference at the state Capitol, Thursday, May 29, 2025.

The debate puts lawmakers like Titone in an especially tough spot. Titone sponsored the AI law and has also been a champion of expanding broadband access. She said it’s a position she doesn’t want to be in, but when push comes to shove, it’s critical to protect people from the potential dangers of AI.

“I don’t think people really quite understand this unless you’re really paying attention, of what can really happen as a result of no regulation in this area, especially for 10 years, which is mind blowing that they even said 10 years because that is an enormous amount of time with AI the way it’s progressing,” she said.

She’s urging her colleagues not to delay the implementation regardless of whether it ends up jeopardizing broadband money.

“It’s very unfortunate and it’s cruel to try to take away this funding that we want to do to connect people to make their lives better. But I think the bigger issue at this point is to put some guiderails on AI at this point, because if we don’t do it now, it can get really bad, really fast and make it even harder to put the genie back in the bottle.”

Colorado’s AI law was already facing significant pushback even before Congress began seeking a federal moratorium. A months-long task force worked to refine its provisions before it takes effect. However, they failed to reach a compromise that would pass at the statehouse. A business-led effort to delay the law’s implementation by roughly a year also failed. In light of all that, Governor Polis supports the federal moratorium, saying this issue requires a national solution.

Polis has said that if lawmakers do have to return for a special session, AI policy would likely be something they’d work on.

Caitlyn Kim contributed to this report.

The fate of the EV tax credits depends on the GOP’s megabill

toggle caption Justin Sullivan/Getty Images North America

The future of the American auto industry — and what’s parked in your driveway — could be shaped by negotiations on Capitol Hill right now.

That’s because the version of what President Trump calls the “big, beautiful bill” that was passed by the House of Representatives last month includes sharp cuts to the tax credits designed to incentivize EV purchases.

President Joe Biden promoted a suite of policies meant to cut carbon emissions by boosting EV sales. That includes “sticks,” like regulations that effectively require companies to build more EVs, as well as “carrots,” the federal subsidies that sweetened the deal by providing financial incentives (to both car companies and buyers) to pivot toward battery-powered vehicles.

Trump has long signaled a desire to roll all of them back.

The House version of the bill, if it’s embraced by the Senate, would bring a cleaver down on a great big pile of those carrots. That would affect new car buyers as soon as next year — and could reshape which cars are available on the market far into the future.

Sponsor Message

Consumer tax credits would phase out soon

Under the bill passed by the House , the consumer tax credit for new electric vehicles ( worth up to $7,500 ) would phase out after 2026. But for most vehicles, it would actually become unavailable at the end of 2025, because it would only be available for vehicles made by automakers that have sold fewer than 200,000 EVs. (That’s a return to how the tax credit was structured before the Biden administration.)

Meanwhile, the tax credit for used vehicles — which was created as part of the Inflation Reduction Act, Democrats’ major climate law during the Biden administration — would be eliminated outright at the end of 2025. That credit was designed to expand the availability of EVs to middle- and lower-income families, addressing a longstanding critique of the tax credit: That it only helped well-off new car buyers. That credit is worth up to $4,000.

Tax credits that incentivize battery manufacturing would not be phased out as swiftly, but companies trying to claim them would face tighter restrictions on Chinese-made components and working with Chinese partner companies, which could make them more challenging to qualify for.

The legislation would also add a new $250 annual fee for EV drivers, imposed by the Federal Highway Administration. Such fees are hypothetically meant to correct for the fact that EV drivers don’t pay gas taxes. However, Consumer Reports has calculated that the proposed fee is more than three times what a typical driver of a new gas-powered car pays in gas tax.

Sponsor Message

Republicans have long chafed at EV incentives

Many Republicans objected to the EV tax incentives passed as part of the IRA, declaring them wasteful spending. They’ve also argued that markets should determine which vehicles Americans drive, without the government incentivizing electric motors over engines.

Historically, the tax credits were critiqued for primarily helping wealthier car buyers. And that’s true: New cars, and especially new EVs, are so expensive that they’re out of reach for most Americans. But the IRA attempted to deal with that, both by adding income caps that kept wealthier people from qualifying, and creating the used vehicle credit, which brought cheaper cars into the mix.

Meanwhile, supporters of the credit say that Republicans have a different reason to eliminate these tax credits: The income tax cuts that Trump has promised are expensive. The current version of the bill extends multi-trillion cuts passed in 2017 .

“That money’s going to come from somewhere,” says Levi McAllister, a partner at the law firm Morgan Lewis who advises companies on a range of topics related to electric vehicles. The EV tax credit, he says, is “certainly a ripe target.”

Democrats in Congress have critiqued the Republican tax and spending package as being designed to benefit billionaires . The package overall helps the richest Americans and hurts the poorest, according to an analysis by the Congressional Budget Office .

Automakers brace for policy upheaval

Automakers knew that Trump’s election would bring huge changes to EV policy. And many major carmakers support the push to pause or weaken regulations, pointing to weaker-than-expected consumer demand for zero-emission vehicles. But at the same time, they have warned that pulling subsidies and tax credits would only exacerbate a vehicle affordability problem, and put some manufacturing investments at risk.

It’s easier to say goodbye to a stick than a carrot.

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In a letter to Trump last fall, the U.S. trade group representing major automakers urged the incoming White House to “preserve auto-related provisions in the current tax code,” arguing they “have fueled investment in domestic EV and battery manufacturing and increased good-paying jobs in automotive communities.”

It’s also challenging for the auto industry to make a rapid U-turn on EV production, when decisions about factories and vehicle designs have to be made years in advance.

U.S. jobs on the line

Some advocacy groups are still holding out hope that senators will preserve at least some of the IRA clean energy credits to bolster U.S. jobs — if not for the sake of climate change.

Those credits have incentivized billions of dollars’ worth of new manufacturing projects, and most of the money, projects and jobs have gone to Republican-leaning districts. That’s true for clean energy projects overall, and for EV-related jobs specifically .

Companies and advocacy groups alike have leaned heavily on the job implications when lobbying to keep these credits. “It’s now up to the Senate to fix this big, ugly mess of a bill,” Bob Keefe, the executive director of the nonpartisan, pro-environment business group E2, wrote in a statement in May. “With more than 400 major clean energy projects and our energy future hanging in the balance, we hope they’ll put their constituents ahead of politics and make America great through action, not words.”

McAllister says that while many EV makers and related companies had hoped that the jobs argument would protect the credits, they’re not counting on it. “I think companies are finally starting to say, ‘Hey, for us to plan, we need to assume all of this, all of it’s going away,'” he says.

A rocky road ahead

Eliminating incentives could dramatically affect the pace of EV adoption. One Princeton study estimated that if the tax credits are repealed and federal emissions regulations are cut, as the White House has signaled it also plans to do, sales of EVs in 2030 could be 40% lower than they would have been if the existing policies stay in place.

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From a business perspective, that would slow the timeline for factory expansions and make it more challenging for American automakers to compete with Chinese companies’ EV innovations . And it would slow progress toward cutting transportation-related emissions, a key part of plans to reduce the damage caused by climate change.

But nobody expects this bill, if passed, to signal the end of the electric vehicle market in the U.S.

Companies started to invest in EVs before the IRA was passed, and they will keep investing in them. There’s a small but committed market for them now, and companies believe better batteries and cheaper vehicles will win over new fans.